Luxembourg, 27/06/2002 (Agence Europe) - As we pointed out in an earlier edition (see EUROPE of 26 June, pp.9 and 10), the EU Council of Ministers is not expected to make any real progress on the proposal of directive aimed at creating a Community market for the trade of greenhouse gas emissions until after the German elections on 22 September, as Chancellor Schröder has clearly expressed his hostility to this. After the Environment Council on Tuesday, three questions remained outstanding, all bearing on the first phase foreseen in 2005-2007, namely the compulsory or optional nature of the emission trading system, the scope of the system and the method for granting rights to pollute. We recall that the proposal - while targeting overall reduction of greenhouse gas emissions - aims to ensure the internal market works correctly and to prevent competition distortion that could result from the establishment of separate national emission trading systems. The first phase of the system proposed by the Commission (early 2005 to end 2007) precedes the first period of requirements foreseen by the Kyoto Protocol. The Council had already discussed the proposal on 12 December last, and a first report on the state of progress of work had been referred to it on 4 March.